A Complete Guide to the Tax Fraud Statute Of Limitations

Statute Of Limitations Tax Fraud

The statute of limitations usually refers to how much time the Internal Revenue Service (IRS) has to pursue tax fraud or tax evasion crimes by filing charges. For instance, with some crimes, you can not be charged unless the incident is filed no more than a year after it happened.

However, the general rule when it comes to tax crime and tax liability is that the statute of limitations on false or fraudulent tax returns starts immediately when you file the return. Still, this does not apply to early filing as the IRS statute will only become active on the statutory date of filing.

Nonetheless, this can vary depending on what tax crime in the internal revenue code you may be facing. In some instances, the IRS statute will extend the period of the statute of limitations.

What Is Tax Fraud?

Tax fraud is not listed in the United States Criminal Code as a specific crime. However, the category of tax crime comprises several crimes such as claiming deductions not due to you or underreporting income among several others. All of these are usually defined under the all-encompassing term of tax fraud.

Other tax crimes may or may not be deemed tax fraud depending on who you consult. Nonetheless, the following is a list of the statutes of limitations for the most common tax crimes and tax fraud charges under the IRS statute.

1. Tax Evasion – 6 years
2. False Statement – 6 years
3. Failure to Pay Tax – 6 years
4. False Claim for Refund – 5 years
5. Failure to File a Return  – 6 years
6. Conspiracy to Defraud the IRS – 6 years
7. Failure to Keep Records – 3 years
8. Conspiracy to Commit Tax Evasion – 6 years
9. Failure to Supply Information – 3 years
10. Attempt to Interfere with Implementation of IRS laws – 6 years
11. Providing False Withholding Exemption Documents – 3 years
12. Disclosing or Delivering False Documents – 6 years
13. Assisting or Aiding in Preparing and Presenting of False Tax Returns – 6 years

Since tax law and tax crimes can be very complicated, it is always advisable to seek legal advice from a skilled tax attorney.

If you have been charged with civil tax fraud or criminal tax prosecution, then you should contact the experienced IRS tax attorneys at the law offices of Carver & Associates. We have the experience and skills to help you deal with the IRS and begin moving forward.

Statute Of Limitations On Federal Tax Fraud

The federal statute of limitations on tax fraud is how much time the IRS has to file charges against a person suspected to have committed tax fraud.

In most instances, the Internal Revenue Service can audit tax returns for up to three years after they have been filed. This means that the federal statute of limitations is capped at three years.

However, if the IRS determines that you left out more than 25% of your income from the filing, the statute of limitations runs for up to six years.

In some instances, the statute of limitations on tax returns can be longer than six years. For instance, if you attempt to leave the US or hide, the statute of limitations clock stops until you are found at which time it will start running down once again.

Additionally, if the IRS is auditing more than one of your returns, the six-year limitation might be based on the last return filed.

Lastly, you need to remember that on the federal level, that statute of limitations is only applicable if you are facing criminal tax charges and not civil. As such, if the IRS intends to bring charges of tax fraud in civil court, there will be no limit on how far back they can go.

If you are looking for a tax fraud lawyer, then you have come to the best place. Carver & Associates is a law firm that has assisted many high net worth individuals, companies, and organizations having legal issues with their taxes.

Is There A Statute Of Limitations On Tax Fraud and Tax Evasion?

The IRS will not always have a forever statute of limitations especially for civil tax fraud which can be limited by a variety of factors. These factors often include when the fraud started, who committed the offense, and what transpired during that time.

When it comes to your tax return, the forever statute is governed by the US Code 6501 which limits collection and assessment on the basis of the following:

• False Tax Return – If you have been charged with a fraudulent or false return charge with the intent of tax evasion, the government may assess taxes or bring proceedings in court for the collection of the tax without any assessment.
• Willful Attempt to Evade Tax – Fraud cases involving a willful attempt to evade or defeat tax imposed will result in tax assessment or court proceedings for the collection of owed taxes without assessment at any time.
• No Return – If you do not file your returns, the revenue service may assess or conduct proceedings in court to collect the tax without warning.

Still, it is important to note the differences between civil tax fraud and criminal tax fraud prosecution (which can result in criminal charges). Criminal tax matters can only be brought against you if the last act occurred in the past six years. If it is prosecuted as a civil charge, the six-year statute can expand and there will essentially be no time limits.

As such, a taxpayer that commits a criminal offense such as tax evasion has to be prosecuted within 6 years. On the other hand, there is no statute of limitations for a taxpayer that has committed a civil offense such as tax fraud.

It is important to note that in tax fraud and tax evasion cases the government has a high burden of proof. Nonetheless, if you have been charged with tax fraud or tax evasion, it is important to contact an experienced lawyer such as those at Carver & Associates. We have represented many clients facing tax issues with stellar results and are ready to help you, too.